Thursday, 24 April 2008

Sister metals Pt & Pd soar! 2008-03-03

Monday 3rd March 2008 10.38 p.m. Sister metals soar!

Market prices: Gold $983.50, Silver $20.31, Platinum $2231, Palladium $578, Rhodium $8985. Platinum is still, as often the case, 100 times the price of silver! This has applied (generally, if not precisely) since silver was $5 and platinum $500 in the not so distant past.

Today, platinum and gold made new all-time highs yet again. There is little point in saying this every time it happens; it's just repetitive. So lets look at the trends and the market commentary.

Bloomberg quotes Ron Goodis, "a trader at Equidex Brokerage Group Inc. in Closter, New Jersey, who has been buying and selling gold since 1978," as predicting $750 palladium and $3000 platinum by year end. He's no fool; he saw the latter phase of the last big major market in metals and the whole time since. He also knows inflation when he sees it!

Meanwhile, David Davis, an analyst at Credit Suisse Standard Securities in Johannesburg sees silver at $25 this year. No kidding! Meanwhile, on the Mineweb site, HSBC forecasts significant palladium deficit.

This is the first time I have seen any comment about a possible palladium deficit (platinum yes but palladium no, until now). Always talk has been of large Russian stockpiles and that was the case while palladium was at $180, $200, $250, $300, etc., right up to $350+ but now we are at $578 the HSBC pops up with this comment! HSBC metals analyst Victor Flores suggested on Sunday that no clear evidence exists of a physical platinum shortage (perhaps this comment is alluding to the power shortages in South Africa not yet actually creating a Pt shortage - not yet). A metals analyst working on a Sunday, eh? The market is moving fast; no time for a weekend off! :-) He sees a platinum high of $2,625 per ounce in 2008.

I really wanted to by some plalladium in 2004-2005 and could never find much. Found a guy in the USA who offered to sell me four 1 ounce bars for $1000. I thought that was a bit of a risk with all these Russian surpluses but there you go. Now we have an announced deficit lurking. There are also Palladium Maples available from the Royal Canadian Mint. Who knows where you could get them in England for less than a huge premium? Basically, you can't. That is what put me off buying Platinum at $500 in 2002, the addition of 17.5% VAT and a massive premium on 1 ounce coins to start with - these costs would easily have been absorbed at $2000 selling price now! Palladium at $200 in 2004-2005 was nice and cheap, a $50 premium was do-able. I then watched as I owned a little palladium and no platinum and platinum soared. It makes me a little happier that now the sister metal Palladium is following - in fact it has risen more in % terms in the last 6 months than Platinum. So I don't think I shall be buying any platinum now. Too expensive (HA! I thought it was too expensive at $460 when I first looked at it)! It just shows.

Today's proverb?

It's not the price that matters, for shares or for commodities; it's the UPSIDE that counts!

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